Carrier and Lennox report Q1 earnings, confirm 10-20% price increases

Carrier and Lennox collectively raked in billions in the first quarter, as reported in last week's earnings, but saw North American residential revenue dip — Carrier by “low-single-digits” and Lennox by 1%. 

After talking Q1, the companies shared what they see ahead. Here’s what to know:

• Both CEOs reiterated that new 454B products will see 10-20% price increases over the next year and a half — Lennox around 10% and Carrier between 15-20%.

• The companies predict 50-70% of customer demand in 2025 will be for 454B equipment — they also anticipate it making up a small percentage of this year’s sales.  

• Lennox expects the cost of 410A to be up “significantly” this year.

• Carrier sees residential volumes growing in each of the remaining quarters, but Lennox forecasts them being flat.

• Lennox CEO Alok Maskara confirmed the company is still interested in acquiring York from Johnson Controls, but didn’t provide any details. 

Of note: Dave Gitlin, Carrier’s CEO, made a point to highlight data centers as a big growth opportunity, attributing his excitement to the rise of AI. 

• “The AI movement is… not only driving data center growth, but also an outsized opportunity for cooling providers, given that AI chips drive 7x the heat generation versus traditional chips,” he noted. 

• “Today, AI makes up about 20% of the load of a typical data center, and some of our customers project that percentage to increase to 80% in the next few years.”

💭 Our thought bubble: Considering price increases, have you noticed customers holding off on replacements this year? Let us know.